Declining export values of milk powder, beef and lamb were contributing factors to New Zealand's trade deficit ballooning to $3.8 billion for the year to March, the largest annual deficit in seven years.
Exports for March stood at $4.2 billion, well down on market and bank predictions, by $450 million to $550 million, while imports were at $4.08 billion, similarly down $200 million to $300 million on expectations.
Statistics New Zealand senior manager Nicola Growden said the large annual trade deficit was from falls in the value of primary produce exports - consistent falls in the value of milk powder, followed by value declines in beef and lamb in more recent months.
ASB rural economist Nathan Penny said the $117 million trade balance was weaker than expected. ASB had expected a $550 million surplus and the market $401 million.
‘‘Much of the weakness was due to a sharp decline in dairy and meat volumes.
‘‘Dairy export volumes plunged nearly 17% while meat exports volumes dipped 12%,'' Mr Penny said.
He noted that month-on-month and seasonally adjusted, the March export values fell 17.2%. Forestry export values added to the weakness with a 3.1% decline.
He expected weak production in dairy and meat during the next year would affect export volumes.
‘‘We expect New Zealand dairy production to fall for a second successive season,'' he said.
Westpac senior economist Satish Ranchhod said that, after adjusting for seasonal influences, the main contributors to March's pull back in the trade balance were lower exports of dairy products, which reflected a mix of softer volumes and prices, and some pull back in meat exports.
‘‘There were also declines in a number of other export categories,'' he said.
On the import side, there were higher value petroleum imports, consistent with the recent pick up in global oil prices, and imports of machinery, he said.
